I'm curious as to the actual plans as well, but I suspect the early engineers seriously underestimated how dangerous the waste materials were going to be. Of course, now I think we overestimate.
They knew very well how dangerous it was. However, you have to look at the timescale. The first nuclear power plants were built in the 50s. In 1952, 12,000 people died in London in a few days in the Great Smog. The Love Canal catastrophe, which ultimately caused mass birth defects and cancers, would not be revealed for another 20 years. The Bhopal Disaster, which killed 16,000 people and caused 558,000 injuries, happened in _1984_.
Non-nuclear industrial disasters greater than any actual nuclear disaster which has ever occurred were a fact of life. For that matter, they still are, to a lesser extent; for all the worry about nuclear waste, power-plant waste has never killed anyone, excepting a small number (< 20) deaths at reprocessing plants, while conventional waste kills thousands every year.
The power nuclear fission got us was remarkable and when they started, the marked wasn't regulated, so the companies could make huge amounts of money. This money was free to pay lobbying. They just outperformed the law makers.
That's not really the way it was; the regulation was always quite tight, and the lack of nuclear development today (outside China and to an extent France) is due to deep public mistrust more than anything else, though changes in the economics of power generation favouring high cost per kWh but low capital cost due to liberalisation of the market are also a factor.
